Understanding Major Forex Pairs in Forex Trading [2026]
Among the long list of forex pairs, from majors and minors to exotics, how is it that only a few currency pairs account for most of the trading activity worldwide?
The answer lies in the unique characteristics of major forex pairs. These pairs tend to be highly liquid, closely followed by traders worldwide, and typically offer tight spreads, making them the backbone of the forex market.
In this guide, we will explore what are the major forex pairs, how to read them, the factors that influence their price movements, and why they continue to play a central role in the foreign exchange market in 2026.
Let’s begin!
The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.
What Are Major Forex Pairs?
While there is no formal definition that determines which currency pairs qualify as “majors,” the term is commonly used to describe the most actively traded pairs in the forex market. These pairs typically involve G10 currencies, representing ten advanced economies with large and liquid financial markets.
Before moving on, it’s helpful to understand how currency pairs are defined.
As with any financial instrument, forex trading is also done to seek a profit from speculating on the changing value of the instrument, such as the share price of a company or the worth of a commodity. Where forex trading differs slightly is that traders here are speculating on the value of one currency, relative to the value of another. So, when the two currencies involved are grouped and valued against each other, they are known as a currency pair.
The most actively traded currency pairs are known as majors, and they form the core of the list of major currency pairs followed by forex traders worldwide.
There are eight major currencies including the USD. Major currency pairs are basically the pair formed by USD with the other seven major currencies, as illustrated in the image below:
How to Read Major Forex Pairs?
When looking at live forex prices on a trading platform such as MT4 or MT5, you will see many currency pairs available to trade. Each currency has a three-letter ISO code, which standardises how currencies are quoted across the forex market.
For example:
- GBP is the British Pound
- USD is the U.S. Dollar
- JPY is the Japanese Yen
- CHF is the Swiss Franc
Reading ISO codes is fairly straightforward. A currency pair shows the value of one currency relative to another, so to read a pair correctly, you need to know which currency is listed first and which one it is being compared against. For example, in EURUSD, the Euro appears first and its value is expressed in terms of the U.S. Dollar.
This brings us to the concepts of the base currency and the quote currency.
Base and Quote Currencies in Major Forex Pairs
Every currency pair, whether major, minor, or exotic, is made up of two components:
- The base currency
- The quote currency
The exchange rate shows how many units of the quote currency are needed to buy one unit of the base currency. For example, if the EURUSD exchange rate is 1.19, it means one Euro is worth 1.19 U.S. Dollars.
Understanding Quotes in Major Forex Pairs
When trading forex, each trade involves buying one currency and selling the other. Traders can choose from multiple pairs depending on which currencies they want to speculate on or hedge against.
On a trading platform, each currency pair is displayed with two prices:
- The bid is the rate that you are able to sell a currency pair at.
- The ask price (also known as the offer) is the rate at which you are able to buy
- The difference between the bid and ask prices is called the market spread. The spread may vary depending on market conditions and the liquidity of the currency pair.
For example, in EURUSD, the price represents the number of U.S. Dollars required to buy one Euro. If the Euro weakens, one Euro will be worth fewer U.S. Dollars, which means the exchange rate will go down.
In this scenario, a trader expecting the exchange rate to decline would look to sell EURUSD, dealing at the bid price.
More generally:
- The bid price is usually used when the base (first-named) currency is being sold
- The ask price is generally used when the base currency is being bought
- A sell position may be considered when an exchange rate is expected to fall
- A buy position may be considered when an exchange rate is expected to rise
You may also notice that the order of currencies differs across pairs. While either currency could theoretically appear first, the foreign exchange rate would be inverted if the order were reversed.
Generally, the U.S. Dollar appears first in a currency pair, though there are exceptions, such as when it is quoted against the Euro (EURUSD) or the British Pound (GBPUSD), among others.
Liquidity and Volume in Major Forex Pairs Trading
The forex market is the most liquid market in the world, yet just a handful of currencies make up the vast majority of the market. Liquidity affects how easily a currency pair can be bought or sold without significantly affecting its price. It is generally said that the larger the trade value between two countries, the more liquid the currency pair of these countries tends to be.
Other than that, the relative political and economic stability often associated with these economies tends to increase their attractiveness, especially during periods of economic uncertainty.
The U.S. Dollar is supported by its status as the reserve currency of choice for central banks around the world, along with the fact that many key commodities, such as oil, are commonly priced in USD which supports ongoing demand for the currency. This high demand not only keeps USD pairs among the most liquid currency pairs but also makes them popular with traders to speculate on price movements against other major currencies.
This combination helps forex major pairs remain highly liquid and actively traded.
Pros and Cons of Trading Major Forex Pairs
What Influences Major Currency Pairs?
Major pairs in forex are often closely followed by traders around the world, which is why they naturally tend to be in the limelight. Their popularity is driven by several factors that encourage high levels of market participation. Let’s explore what they are.
1. Economic Data and Market News
Forex pairs are sensitive to economic data releases and how the news is perceived by traders. Based on the expected outcome of several important events such as employment figures, inflation data and GDP numbers, traders often adjust their positions.
Furthermore, economic data releases tend to attract close attention as they provide insight into the health of an economy and may influence future policy outcomes. To stay up to date with upcoming events, traders often keep a close eye on the economic calendar, as it helps them keep track of upcoming events.
2. Central Bank Policy and Interventions
Apart from economic releases and news outcomes, central bank actions and policy expectations also influence the price action of major forex pairs. Interest rate decisions and forward guidance are often seen to trigger sharp price swings in currency pairs. This can also lead to wider spreads, particularly when outcomes differ from market expectations.
An example of this was seen in September 2022, when the new U.K. government announced a radical economic plan aimed at boosting growth through large, unfunded tax cuts. The announcement came a day after the Bank of England warned that the U.K. economy was likely already in a recession. As a result of this policy mix, the British pound fell 3.5% against the U.S. dollar in a single day. Such events remind us how risk management is non-negotiable in trading.
3. Liquidity and Trading Volume
Major currency pairs typically record high trading volume and are often the most liquid. With greater liquidity, trades could be executed quickly without significantly disturbing the price much, resulting in tight spreads under normal market conditions. Because of these features, scalpers and day traders tend to prefer such pairs for jobbing.
With that being said, higher liquidity does not eliminate the risk. Even the most actively traded currency pairs may experience sharp volatility and wider spreads, especially during uncertain times or around major economic announcements.
4. Market Conditions and Risk Sentiment
A change in broader market conditions or global market sentiment could influence the price action of major currency pairs. For example, during periods of economic or political uncertainty, certain currencies may attract increased attention due to their perceived stability or safe-haven characteristics.
In 2023, rising tensions around the Israel-Hamas conflict coincided with periods of strength in the Swiss Franc, as some investors looked for relatively safer places to park their funds. A similar pattern was also seen during mid-2025, when concerns about potential U.S. tariff policies led to renewed demand for the Swiss Franc. That said, such behaviour is not guaranteed and may change depending on broader economic and market conditions.
Major Forex Pairs: The Bottomline
A sensible way to begin trading forex is to start with what you’re familiar with. If you have insight or familiarity into a particular economy, you may naturally feel inclined to trade its currency, even if that means trading a pair that is not one of the forex majors.
That said, major currency pairs often offer certain advantages, such as generally tighter spreads and readily available economic news and market analysis, which may make them a practical starting point for many traders exploring the forex market.
For traders just starting out, opening a free demo account could be a good first step.
A demo account allows you to practice forex trading under simulated market conditions without any financial pressure. This way, traders can trade and understand how economic events impact price movements and build confidence before moving on to live trading.
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Frequently Asked Questions on Major Forex Pairs
What are the major currency pairs?
Major currency pairs are the most traded currency pairs in the forex market and are also the most liquid. Such pairs often involve the USD versus another strong economy’s currency. For example, EURUSD, GBPUSD, USDJPY, USDCHF and so on.
What is the strongest forex pair?
Generally, a forex pair is considered strong when the base currency is rising against the quote currency or when the pair attracts demand due to any reason. So, the strongest currency pair can vary depending on prevailing market conditions. However, traders can check the currency strength meter to see which currencies are strong and which ones are weak at any given moment.
Which major forex pairs have the highest trading volume?
Unfortunately, there isn’t a single major forex pair that consistently holds the top spot, as trading volumes can change over time.
What’s the difference between major, minor, and exotic forex pairs?
Major forex pairs are the most traded and liquid pairs, usually involving the US Dollar and other leading economies. Minor pairs don’t include the USD but involve major currencies, while exotic pairs combine a major currency with a less-traded or emerging-market currency.
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